This is a guest post from Braulio Giron Jr. of Lamudi Philippines
The process of selling real estate is not always cut and dry, especially when the property being sold remains under the name of a deceased owner.
Yet, it continues to occur. Many real properties remain titled to a deceased parent, grandparent, or next of kin. This often occurs when an estate consists of solitary property that the heirs use and/or maintain together, and don’t feel the need to divide and transfer in an official capacity.
The non-transfers eventually prove to be cumbersome, particularly when the heirs finally wish to sell the property or receive their rightful share of an estate. Conventional thinking would suggest settling ownership through judicial proceedings, but the lengthier process can actually be foregone in favor of an extra-judicial settlement of estate instead.
What is an extrajudicial settlement of estate?
“Extrajudicial” means “outside of court”; hence, an extrajudicial settlement of estate means heirs do not need go to court to partition the properties left by a deceased decedent.
It is settling an estate by drafting a contract where the properties are divided among the heirs as they see fit. Enumerated in the contract are the properties left by the deceased, which is collectively recognized as the “estate.”
What are the requirements of an extrajudicial settlement of estate?
An extrajudicial settlement of estate is only possible if the decedent had left no will. In the event that there is one, extrajudicial settlement is only applicable to the properties not addressed in the will. The decedent’s estate must also not have any existing debts. Should there, these must first be satisfactorily paid, with the remainder being what is subject to division among heirs.
Speaking of heirs…
When heirs are not able to reach an agreement on the division of the properties, they are relegated to having to filing a standard action for partition instead.
All heirs must also be of legal age. Should one be a minor, he or she must be duly represented by judicial or legal representative.
Solitary heirs may adjudicate the entire estate to him or herself by means of an affidavit. Called an “Affidavit of Self Adjudication,” this is filed in the Register of Deeds of the locale where the decedent resided.
A group of heirs, on the other hand, must reach an agreement and subsequently divide the estate among themselves by way of a “Deed of Extrajudicial Settlement of Estate and Adjudication of Estate.” This must be signed by all heirs, notarized before a Notary Public, and contain the following information:
- The decedent left no will and no debt
- Each heir’s relationship to the decedent
- That they are the decedent’s only surviving heirs
- An inventory with individual descriptions of the decedent’s properties, both real and personal, that the heirs have agreed to divide among themselves
- The exact manner which the properties are to be divided
The heirs then secure a bond from a reputable bonding company recognized by the Register of Deeds, and file it simultaneously with the registration of the notarized “Deed of Extrajudicial Settlement and Adjudication of Estate.”
Upon successful completion of notarized extrajudicial settlement of estate, legal owners can readily put their real estate properties up for sale with minimal difficulties, whether it be featuring it on a real estate listings website, having it attached to a particular broker, or transferring it to its eventual buyer.
About the author
Braulio Giron Jr. is a Content Writer for Lamudi, the Philippines’ largest and fastest growing online real estate platform. Braulio also writes for the blog The Pinoy Fighter, which publishes latest news about the local mixed martial arts scene.